Audit warns that deficits run up by NHS trusts are 'unsustainable'

The growing financial stress on the NHS is “not sustainable”, with the government forced to plough more than half a billion pounds of emergency cash into struggling health trusts last year, auditors have warned.

A quarter of NHS and foundation trusts were in deficit by the end of the financial year, with the number in the red rising from 25 to 63 over 12 months, a report by the National Audit Office found.

Some £511m was spent bailing out 31 trusts in England in 2013-14 – nearly double the £263m spent in the previous year – including 16 trusts that had not previously needed a cash injection.

“The growth trend for numbers of NHS trusts and foundation trusts in deficit is not sustainable”

Margaret Hodge

Margaret Hodge, chair of the Public Accounts Committee, said the “deeply alarming report” showed the future sustainability of the NHS was at risk.

Amyas Morse, head of the NAO, said: “An increasing number of healthcare providers and commissioners are in financial difficulty. The growth trend for numbers of NHS trusts and foundation trusts in deficit is not sustainable.

“Until the Department of Health can explain how it will work with bodies such as NHS England, Monitor and the NHS Trust Development Authority to address underlying financial pressures, quickly and without resorting to cash support, we cannot be confident that value for money will be achieved over the next five years.”

Cash injection

The DoH has now issued £1.8bn in cash injections to 46 NHS bodies since 2006-07, while just £160m has been repaid, the NAO said.

Among the struggling trusts to be bailed out in 2013-14, North Cumbria University Hospitals received the highest total of £42m, followed by Peterborough and Stamford Hospitals with £40.7m and University Hospital of North Staffordshire with £37m.

Amyas Morse

Forty-four health trusts moved from surplus in 2012-13 to deficit in 2013-14, according to the report.

Overall, NHS bodies achieved a net surplus of £722 m in 2013-14 – a third of the £2.1bn recorded in the previous 12 months, the report found.

NHS and foundation trusts recorded a £91m deficit in the last financial year, the NAO said.

A total of 82 NHS organisations were in the red by the end of 2013-14, while the number of NHS and foundation trusts with a surplus fell from 222 in 2012-13 to 182.

“When trusts are under this kind of financial stress it is the quality and safety of patient care that can suffer”

Margaret Hodge

By the end of June 2014, health trusts were forecasting a net deficit by the end of the current financial year of £424m, the NAO said.

The government spending watchdog added that a rising proportion of foundation trusts could not meet the standards met by healthcare regulator Monitor, with 18% in breach of their licence.

Ms Hodge said: “This is a deeply alarming report. I do not believe it is an exaggeration to say that the future sustainability of our National Health Service is at risk.

Margaret Hodge MP

“The gross deficit of NHS and foundation trusts is up by an extraordinary 150%,” she said. “Some trusts are only getting by on handouts.

“Things are getting worse rather than better and we all know that when trusts are under this kind of financial stress it is the quality and safety of patient care that can suffer,” she added

“The department, NHS England, Monitor and the NHS Trust Development Authority between them must explain to my committee how they are going to get a grip on this wholly unsustainable situation and get our NHS back on track,” said Ms Hodge.

The DH allocated £95.2bn to NHS England in 2013-14 to pay for NHS services, the NAO said.

Growing pressures

NHS England chief executive Simon Stevens said: “Week in, week out NHS staff go the extra mile to ensure their patients get excellent care. But an ageing population, a growing population and the possibilities of new treatments all mean that pressures are real and we need to get going on the new path set out in the NHS five-year forward view.”

The DH said the NHS budget had increased by £12.7bn since 2010 and the majority of health providers are still in financial balance or better.

“This report delivers a devastating verdict on the NHS reorganisation David Cameron said would not happen”

Andy Burnham

A DH spokesman said: “Financial discipline must be as important as safe care and good performance. Many NHS organisations are already achieving this and all understand the need for greater efficiency.

“Our reforms put power in the hands of local doctors and nurses to make decisions and control their own budgets to make sure patients receive the best services,” he said.

Shadow health secretary Andy Burnham said: “This report delivers a devastating verdict on the NHS reorganisation David Cameron said would not happen. It has brought the NHS to the brink of bankruptcy by wasting £3bn.

Andy Burnham

“Across England, the NHS is running out of money and patient care is heading backwards. It is clear ministers have lost control of NHS finances, with a massive deterioration in the last year,” said Mr Burnham.

“The NHS is heading for the rocks,” he said. “It proves David Cameron cannot be trusted with it. He must produce an urgent plan to show how he’ll turn the NHS around.

“Labour will rescue the NHS with our £2.5bn Time to Care package which will fund new staff including 20,000 more nurses – investment the Tories will not match,” he added.

Cutting the “staggering” level of spending on agency workers and improving the way staff from black and minority ethnic backgrounds are treated have been earmarked as key priorities for nursing in the NHS, its chief executive has told Nursing Times.

Hospital trusts in England are to receive money from a fund worth more than £145m to improve care for patients over winter, the government has announced.

Readers' comments (1)

Anonymous7 November, 2014 2:23 pm

Far more than likely due to the fact that through various MARS and 'voluntary' redundancy packages that they've shed so many long term staff who've had enough of the constant changes...it doesn't give a realistic picture at all.

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